The cost of consumer goods and services in Ireland is estimated to have increased by 0.5 per cent in the year to November, according to the latest flash estimate for the harmonised index of consumer prices (HICP).
This was up from a rate of 0.1 per cent the previous month. Despite the rise, the headline rate remained close a three-year low.
The weaker levels of inflation seen in the Irish economy over the past year are being driven in the main by falling energy prices.
The latest HICP indicated that while energy prices are estimated to have grown 0.2 per cent in November, they were down 7.7 per cent year-on-year. Food prices were estimated to have risen by 0.3 per cent in November and to have climbed by 1.7 per cent in the past 12 months.
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The HICP excluding energy and unprocessed food, the underlying rate of inflation, was estimated at 1.7 per cent in November.
The Irish rate will feed into wider euro zone inflation data due on Friday. The headline rate for the euro zone was 2 per cent in October. Euro-wide figures are expected to pave the way for further European Central Bank (ECB) interest rate cuts in the coming months.
Amid a faster-than-expected softening in inflation, Frankfurt is expected to implement several more rate cuts between now and next March, including one in December.
The HICP differs from the CSO’s consumer price index (CPI), the official measure of inflation in the Republic, as the former does not include items like mortgage repayments and building materials. As a result, inflation as measured by the HICP has fallen more quickly than under the “official” consumer price index, which put the headline rate at 0.7 per cent in October.
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